Bryan Taylor, Chief Economist and Michelle Kangas

Global Financial Data

               The U.S. stock market fell into a bear market on March 12, 2020 ending the bull market that began in 2009. The bull market had begun on March 9, 2009 and peaked on February 19, 2020.  The S&P 500 rose 400% between 2009 and 2020, the Dow Jones Industrials rose 351% between 2009 and 2020. The NASDAQ Composite fell into a bear market in 2018 when it declined 23%, bounced back 58% between 2018 and February 19, 2020. The NASDAQ has fallen 26% since then.

Figure 1.  S&P 500, 2009 to 2020

The GFD US-100 Index provides more history than any other stock market index ever developed beginning in the year 1792. By our calculation, there have been twenty-four bull and bear markets since 1792 with four occurring in the 1800s, seventeen in the 1900s and three in the 2000s. The worst bear market was in 1929-1932, led by an 89% decline in the Dow Jones Industrials. The two previous bear markets in this century both had declines of 50% in 2000-2002 and 2007-2009. The 2000 bear market lasted over two years and the 2007 bear market over one year.  By comparison, the 1987 and 1990 bear markets only lasted a few months before the market bounced back.

What is interesting about this bear market is how quickly it hit and how sharply markets throughout the world have dropped in tandem in response to the Coronavirus epidemic. There was no gradual spread of this financial pandemic.  It hit all the world’s stock markets simultaneously. In many countries, the 2020 bear market is a continuation of the bear market that began in 2018.

Figure 2.  United States 10-year Bond Yield, 2010 to 2020

               The extent of the bear market in 22 countries and for global indices is provided in Table 1. The table shows the date of the market top, the value the index hit on that date, the change from the previous market low, the current value of the market, and how much each market has fallen since the top in 2018 or 2020.  The only major market in the world which has not fallen into a bear market this year is the Chinese market, the country where the coronavirus originated. However, the Chinese market has been in decline since 2015.

Figure 3.  Shanghai Stock Exchange “A” Shares Index, 2010 to 2020

               So far, global markets have fallen by around 30-40%.  The question is, how much more are the markets likely to fall?  Will this be a short-lived bear market as occurred in 1987 and 1990 or a more extended bear market as occurred in 2000-2002 and 2007-2009?

It should be noted that fixed-income markets have already hit their bottom.  This occurred on March 9 when the 10-year bond yield hit 0.381% and the 30-year bond fell below 1%. Yields have risen since then. Moreover, the Shanghai Index bottomed out on February 3, 2020 when the stock market reopened after the Chinese New Year and has not participated in the worldwide sell off.  Both of these are positive signs that the bear market will not continue for an extended period of time.  We will update Table 1 on a regular basis so our readers can follow the changes that occur in this bear market.

 

Country Index Market Top Value Change Market Low Value Change
Asia
Australia All-Ordinaries 2/20/2020 7255.2 133.16 3/18/2020 4998.8 -31.10
China Shanghai A Shares 6/12/2015 5410.86 165.15 12/27/2018 2600.05 -51.95
Hong Kong Hang Seng 1/26/2018 33154.12 80.98 3/18/2020 22291.82 -32.76
India BSE Sensex 1/14/2020 41952.63 82.79 3/18/2020 28869.51 -31.19
Japan TOPIX 1/23/2018 1911.31 59.77 3/16/2020 1236.34 -35.31
Singapore FTSE ST All-Share 1/24/2018 877.87 40.38 3/18/2020 589.15 -32.89
South Korea Korea SE Price Index 1/29/2018 2598.19 57.21 3/18/2020 1591.2 -38.76
Taiwan Taiwan Weighted 1/14/2020 12179.81 56.41 3/18/2020 9218.67 -24.31
Europe and Africa
Belgium All-Share 4/13/2015 13859.94 104.31 3/16/2020 7376.45 -46.78
France CAC All-Tradable 2/12/2020 4732.14 56.27 3/18/2020 2888.89 -38.95
Germany CDAX Composite 1/23/2018 625.19 50.07 3/18/2020 363.83 -41.80
Italy FTSE Italia All-Share 2/19/2020 27675.06 39.43 3/12/2020 16286.37 -41.15
Netherlands All-Share Index 2/12/2020 904.31 54.15 3/18/2020 574.88 -36.43
Norway OBX Price 9/25/2018 523.06 70.44 3/16/2020 329.67 -36.92
South Africa FTSE All-Share 1/25/2018 61684.8 246.26 3/18/2020 38604.88 -37.42
Spain Madrid General 4/13/2015 1203.82 99.78 3/16/2020 608.26 -49.47
Sweden Affarsvarlden 2/20/2020 708.36 67.75 3/18/2020 472.89 -33.24
Switzerland SPI Price Index 2/19/2020 731.04 140.71 3/16/2020 548.52 -24.97
United Kingdom FTSE-100 5/22/2018 7534.4 99.27 3/18/2020 5080.58 -32.57
Americas
Brazil Bovespa 1/23/2020 119528 217.51 3/18/2020 66894.95 -44.03
Canada TSE-300 2/20/2020 17944.1 51.52 3/18/2020 11757.61 -34.48
Mexico Mexico IPC 7/25/2017 51713.38 206.16 3/18/2020 35532.74 -31.29
United States DJIA 2/12/2020 29551.42 351.37 3/18/2020 19902.82 -31.69
United States S&P 500 2/19/2020 3386.15 400.52 3/16/2020 2397.38 -29.2
United States NASDAQ 2/19/2020 9817.18 58.52 3/16/2020 6904.59 -29.67
Global
Emerging Markets MSCI Emerging Free 1/29/2018 1278.53 85.69 3/18/2020 787.812 -38.38
Europe MSCI Europe 1/25/2018 1926.57 47.52 3/18/2020 1156.101 -39.98
World MSCI World 2/12/2020 2434.95 35.63 3/18/2020 1682.252 -30.91
World MSCI EAFE 1/25/2018 2186.65 46.52 3/18/2020 1376.212 -37.06

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